Opinion » Lead

Updated: March 12, 2012 16:11 IST

High on rhetoric, low on substance

Shalini Singh
Comment (35)   ·   print   ·   T  T  

Rather than using the Supreme Court's judgment to improve governance and reduce discretionary powers, the government is making a desperate attempt to restore false prestige by seeking a review of 2G verdict.

The United Progressive Alliance government's petition seeking a review of the Supreme Court judgment cancelling 122 telecom licences makes another desperate bid to protect its discretionary powers in the allocation of scarce natural resources by arguing that auctions cannot be the only method for its allocation.

However, the government's petition, apart from stubbornly repeating old arguments that have been shot down by the courts several times over, goes on to expose a flawed interpretation of the Supreme Court's judicial reasoning.

While the judgment addresses itself specifically to the massive commercial value attached to “scarce” natural resources, the review petition conveniently refuses to acknowledge either scarcity or commercial value while arguing that restricting the allocation of “natural resources” to auction methodology will lead to arbitrary consequences and hurt public interest. Unsurprisingly, the government is unable to explain how.

Despite the government's opposition to auctions, its petition fails to explain why auctions were chosen for spectrum in 1995, 2001 and 2010 and, further, recommended by the TRAI in February 2011. Or how a first come, first served (FCFS) system can work in a situation where demand (in terms of equally placed candidates for the scarce resource) far exceeds supply, or even why the government feels obliged to refuse legitimate revenue from applicants who are willing to pay for spectrum based on their business case. In the 2G scam, scarce spectrum allocated cheap through a FCFS method was monetised through “private” auctions, ensuring gains for individual promoters rather than the people of India.

The petition steers clear of the fact that auctions can be designed for a specific outcome by imposing conditions such as price caps for voice calls and SMSs, or a lower rural tariff. For example, when auctioning toll roads to the highest bidder, the government ensures that pedestrians, cyclists and two-wheelers are allowed free passage. While finding fault with auctions, the government is at a loss to demonstrate what the fault is.

For the government to assume that the judgment bans any alternative methodology to auctions is naive. If the government attempts an auction at a certain reserve price, fails, re-auctions at a lower reserve price and fails again, it must use another methodology. However, the Sachidanand Pandey vs the State of West Bengal case cited by the government itself demands that these circumstances be compelling and documented. Ironically, the petition not just fails to document compelling reasons but ignores the fact that the judgment only relates to those natural resources which are scarce and deliver monetisable commercial value in private hands.

It is equally inexplicable why the government is openly uncaring of the fact that except for auctions, practically all other methodologies — and FCFS or beauty parades in particular — violate Article 14 of the Constitution. In addition, auctions support the policy provisions of the National Telecom Policy 1999 seeking transparent allocation of spectrum; the 10th Five Year Plan linking spectrum pricing to scarcity; the Prime Minister's letter of November 2, 2007 seeking 2G auctions/market-based pricing; Finance Secretary D. Subbarao's attempts to secure auctions/indexation-based pricing for 2G spectrum, and the Group of Ministers (GoM) decision to auction 3G spectrum in 2010.

Laughable attempt

Despite this, in a laughable attempt to argue against auctions for “scarce” natural resources, the petition quotes cases of award of contracts without auctions for resin tapping in Kashmir, saal (oil) seeds in Madhya Pradesh and “distilleries” (liquor), which hardly qualify as scarce natural resources.

The government is opposed to judicial scrutiny of “government policy.” Can it hope to establish a Minister's illegal decision implemented without the Cabinet, the GoM or the full Telecom Commission's approval after bypassing opposition from the Prime Minister, the Finance Secretary and the Law Minister as government policy?

The government's own claim in its affidavits in the Supreme Court, multiple press releases, interviews and statements is that the former Telecom Minister, A. Raja's decision was based on telecom regulator TRAI's recommendations. Any decision of the government based on TRAI's recommendations is open to full judicial scrutiny under Section 14 of the TRAI Act. So on what grounds can the government claim insulation from judicial scrutiny?

The Supreme Court judgment rightfully categorises auctions as a “methodology.” Decisions of the Cabinet to liberalise a sector, allow or increase foreign direct investment and invite private capital are matters of policy, but its implementation in terms of timing, procedure and terms and conditions are executive decisions. In the telecom sector, the latter falls strictly in the purview of the TRAI Act. The government's decision-making in this respect is curtailed by law under Section 11(1)(a)(i) & (ii), read with the second, fourth and fifth provisos of the TRAI Act. In effect, all procedures like FCFS, beauty parades or auctions qualify for judicial review.

Even if one were to accept the government's fragile claim that FCFS is a policy and not an executive decision, the petition still fails to demonstrate a single public announcement of this so-called policy since the formation of the Unified Access licence regime on October 31, 2003. It is missing in TRAI's October 27, 2003 recommendations, the Cabinet decision of October 31, 2003, the licence guidelines and amendment of the National Telecom Policy 1999 on November 11, 2003 and even revised licence guidelines announced by the UPA government on December 14, 2005. The government is welcome to demonstrate otherwise. Had the FCFS “policy” not been kept a state secret, applicants would have queued up earlier than they did. The truth is that the FCFS process was deviously announced for the very first time by Mr. Raja at 1.47 p.m., less than two hours before executing the 2G scam on January 10, 2008.

Finally, even though rarely used, the powers of the Supreme Court in entering and adjudicating on the government's implementation of policy are indisputable, especially when the implementation is secretive, arbitrary, illegal, malicious, discriminatory and violates multiple provisions of law (in this case the TRAI Act) and Article 14, 19(1)(g) and 21 of the Constitution guaranteeing equal opportunity through transparent procedures for all citizens to access a resource/contract allocated by the government.

The government's tiring correlation of FCFS with public interest in terms of affordability, growth, and teledensity is also unsubstantiated in its petition. How auctions hurt urban or rural teledensity or affordability is not explained. Was the UPA intending to hurt public interest by holding auctions for 3G in 2010? Can it explain how Vodafone continuously cut back tariffs after paying $12 billion to buy out Hutch's stake in Hutch Essar in 2007? Why does higher revenue for the exchequer, which translates into roads, schools, hospitals and welfare schemes for the poorest of the poor, not count as public interest?


One would expect the government to be peeved about the reality of Mr. Raja's FCFS performance, which led to windfall gains for new operators who pocketed 30 per cent of scarce spectrum to serve less than 5 per cent of India's subscriber base. The failure of these firms to roll out telecom networks has forced the government to initiate steps to terminate their licences. Despite this, the government continues to argue that bringing in these companies served public interest, teledensity and affordability.

How does the government hope to justify its obsessive compulsion in ensuring a level-playing field with incumbent operators for seven illegally picked new entrants while totally ignoring the fact that 343 similarly placed applications were denied a fair chance of accessing 2G spectrum? Ludicrously, the government is arguing its right to discriminate in the application of the level-playing field itself.

Unfortunately, the review petition has no substantial counter to offer the Supreme Court on these critical issues despite access to the finest legal brains in the country and within the Cabinet. The Attorney General and other legal luminaries have already argued all these issues and still failed to impress the court.

One would have hoped the government would be mindful, even grateful, for the Supreme Court's restraint in avoiding any adverse observations in its judgment on issues of collective Cabinet responsibility, the Prime Minister's failure to check a Minister, or the Finance Ministry's inability to invoke its powers under the Government of India (Transaction of Business) Rules to stop a Minister from grievously hurting the exchequer and, by consequence, the common man. Instead of implementing the judgment and restoring its lost dignity, the government is provoking the court, increasing uncertainty and wasting time with its attempt at a review. Perhaps, like the election verdict, it is time for the UPA to accept defeat in the 2G matter, gracefully or otherwise.

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The article is well written with meticulous details. Though the spectrum was allocated by FCFS method and had been decided two hours before the execution, none of the corporates complained about it. It is very striking to see the corporates sit calmly, even though some of them were not allocated spectrum. Does this mean that the corporates are not relying on government procedures but are relying on acts of corruption ? Has the corruption become a way a life? seems so to me.

from:  Vishwanath
Posted on: Mar 14, 2012 at 04:58 IST

When high profile dignitaries of the Government are serving jail terms without proper trial we may not have much to agitate about the decision of the Supreme Court. We may continue to argue on technical grounds but in reality we may not have much to defend. We have to make a beginning in respect of misappropriation of public money be it telecom or civil aviation or other departments.

from:  Manas
Posted on: Mar 13, 2012 at 12:22 IST

This is called "rolling after falling". The UPA or let us say the Congress specifically has lots of lawyers in its brigade . Most of whom are "spin doctors" and who lack any credibility with the public today .This is their handiwork . With a PM who does not assert himself , its a free for all in the UPA . I wonder whether he knows about this review petition being filed in the Supreme court !

Posted on: Mar 12, 2012 at 16:30 IST

Shalini Singh and the commentators missed the point. Is it constitutional for the
judiciary to pass judgement in policy matter? The judges themselves were patently
aware of this and did in the name "public interest". Are the unelected judges the
rightful keeper of public interest? Why do we have parliament and executives?

If the government implement the verdict and if it result in 5 fold rise in calling rate
besides lack of service to the millions, will the Supreme Court take responsibility?

from:  Rajesh
Posted on: Mar 12, 2012 at 06:59 IST

In real legal sense, Mr. Raja has not committed any offence. He is a
well educated, talented, highly skilled and capable person as well as
a firm believer in his righteous conduct in the case of 2G allotment
issue. He is not applying for bail because he is convinced about his
legal rights and is convinced that he is wrongly charged. In fact, Mr.
Raja was just following the procedures and methodology laid down by
the previous NDA government, to which his Party, the DMK belonged too.
He was following the framework laid down by his predecessors. Only
thing was that he implemented them very forcefully and arbitrarily,
may be even arrogantly. The policy itself has brought about
unprecedented growth in the telekon sector in India and the mobile
communication techonlogy reaching millions of common people. Mr. Raja
will be announce not guilty, if not today, tomorrow. The policy might
have caused apparent loss, but it was not illegal. It was perfectly
legal and correct.

from:  boban
Posted on: Mar 12, 2012 at 04:29 IST

Good that The Hindu published this article despite its length. I think quality should always trump the length consideration, i.e., if the quality is good, then the length shouldn't come in the way of publishing an article.

from:  chaman
Posted on: Mar 11, 2012 at 23:07 IST

Perfect As always. wonderful article

from:  yajin
Posted on: Mar 11, 2012 at 17:32 IST

Excellent article!! Hope the Supreme Court comes out full guns blazing and makes some snide remarks against UPA II ministers' and think tank.

from:  Jay
Posted on: Mar 11, 2012 at 15:44 IST

Outstanding article Miss Singh! Thank you. The government, in its position of straddling the very fence of survival, is simply gambling in case it experiences a windfall Supreme Court apostasy. Kasab is more likely to be pardoned than the government in the 2G case. For shame UPA II.

from:  Samir Mody
Posted on: Mar 11, 2012 at 14:48 IST

What an excellent and detailed analysis. Hat off to Shalini Singh for
pointing out the false stand taken by Government in 2G case. Government decision to appeal against supreme courts verdict is showing face of
UPA-2... and this also brings one thing to foray that it will not be A.
Raja alone there could be many more who are under pressure from all
those companies which have paid them for their service...

from:  Vivek Tripathi
Posted on: Mar 10, 2012 at 23:59 IST

Almost brought tears in my eyes. This is one of the best articles I
ever read on 2G issue. Thank you!

from:  Mithun
Posted on: Mar 10, 2012 at 22:12 IST

A well argued presentation of the situation with regard to the spectrum affair. There is no rhetoric and the criticism is made out with moderation in language. The government should own up that they have bungled and set the wrong right without protecting the errants however high their position be.
It should also advise their strident MPs on the JPC not to indulge in ragging the CAG in an inquisitorial manner in which they have done. This has not helped their cause.

from:  Dr S.Srinivasan
Posted on: Mar 10, 2012 at 21:51 IST

Remarkable article for a Government that played a no holds barred battle with constitutional institutions like CVC,CAG,Election Commission with the intention of weakening it, this review petetion comes as the last point of political bankruptsy.Hopefully this will be the lowest UPA can stoop to conquer. Given that at various times FCFS was opposed by various departments under Union cabinet and under which Chidambaram (he too suggested auction is a better process) himself is hiding. It is strange that Governmennt is seeking a petetion in order to revoke the earlier supreme court judgement which would justify not just FCFS in case of 2G allocations but also the mal intent with which Raja has created procedures to loot the public exchequer.

from:  vamsi
Posted on: Mar 10, 2012 at 20:37 IST

This is brilliant! Point by point rebuttal of the pathetic and last ditch attempt by a Government which
continues to live in denial. Any retrieval is feasible only the pretence falls and genuine desire to govern
honestly returns. Otherwise, the three musketeers - the Home Minister, Telecom Minister and Law
Minister all trained legal professionals will continue to find loopholes even in Supreme Court judgment.

from:  Ravi
Posted on: Mar 10, 2012 at 18:12 IST

Congratulations and thanks to Shalini Singh for the thought provoking Article on
the 2G Spectrum issue and also the 'Hindu' for keeping the nation posted with
suchl issues of importance. It is a great pity that in spite of the clear-cut verdict of
the Supreme Court, Government instead of accepting the verdict gracefully, has
taken recourse to filing a review petition. This amounts to nothing but a ploy to
delay further action as indicated by the SC. The Article also shows how Ministers
and their minions could get away with impunity after blatantly manipulating
well-established rules and regulations to suit their selfish interests. The days of
such manipulation are now over and the law is now taking its natural course. As
the writer points out "it is time for the UPA to accept defeat in the 2G matter
gracefully or otherwise"

from:  T.S.SREENIvasan
Posted on: Mar 10, 2012 at 18:11 IST

Forcefully presented..but missing on facts Spectrum, except the 3G band was never auctioned. In 1995,2001 etc.the bid was for obtaining a licence and not for spectrum. An operator with UAS licence could provide both wireless and wireline services. So if one goes by the argument that it was spectrum that was auctioned it has to be accpeted that the fixed line service providers have paid for something they do no need for their services. Unseen fact is that operators who were dominating the market with the best of the spectrum (900MHz band) and had made their money by fleecing subscribers with charges upto Rs 18 per call could not stand a situation where more operators entered their exclusive domain pulling their margins down. They successffuly created an impression that new operators got spectrum without auction while they too were the beneficiaries of a no-auction regime.Instead of auctioning this resource to corporates Govt should think of enhancing the spectrum usage fee.

from:  Deepak
Posted on: Mar 10, 2012 at 15:54 IST

The Manmohan Singh government, like a caged animal, is desperate. It doesn't know how to get out of the judicial clutches in the 2G scam. Irrational decisions are the products of desperation. Shalini Singh has brought out well the irrational behaviour of a desperate government.

from:  K.Vijayakumar
Posted on: Mar 10, 2012 at 15:50 IST

Single tender or nominated tender is resorted to only in case of emergency like flood relief restoration of rail and road traffic
after flood and natural calamities, emergency conditions during the war. Even when white man was carrying his burden in India he was not looting money like this by not resorting to single tender and that too with first cum first basis

from:  ram
Posted on: Mar 10, 2012 at 15:16 IST

This government is for corruption unlimited.

from:  Hilary Pais
Posted on: Mar 10, 2012 at 15:07 IST

yaa once again great article... let us wind-up the entire political executive, and put the entire bureaucracy under the executive control of Judiciary. There is no need for political system,cost of elections. Even if the policy making is directed by the non-elected judges of SC and HCs there is hardly any need for Cabinet ad Council of Ministers.

from:  Sathish
Posted on: Mar 10, 2012 at 13:52 IST

The Late Shri.Jaya Prakash Narayan(original J.P) was reported as sayin "VINASH KAALE VIPAREETH BUDDHI "when taken by the Police in the Midnight Scoop(actually Very Early Hours ) for his opposition to then P.M in the night prior to Declaration of Emergency.
The People of India is WATCHING VERY CAREFULLY and any MOVE by the Govt piloted by the discredited FEW to Dilute the S.C Order and Back Door Restoration of Licenses to the 122 Licensees WILL BE A POLITICAL "HARAKIRI"
The ONLY solace is that B.J.P has Lost the Will and Cadre Support in the country -except in Very Few pockets. Even where Congress is confortable the Centre is Doing Everything to make them weak by forcing them adapt Anti-People laws.

from:  arackal narayanan
Posted on: Mar 10, 2012 at 13:44 IST

Government might be wrong on some perspectives to file the petition seeking review of the 2 G Scam Judgement, But the point that auction in everything is unjustifiable. Every person in this country has its share and everyone is a stakeholder so like the reservation for backward classes and some benefits to MSME firms it is the responsibility of the the Government to give a level playing field by assigning some parameters, if it really thinks about the urban or rural teledensity or affordability and access. Just by claiming that they have done right by considering the affordability and an all for public interest now at this point is a lame excuse. Even for the next auction also if they think it is in the public interest to give the license to some companies they need to mention the eligibility criteria for such allocation. Such criteria should be vetted by higher authority so that afterwards no one can backout for their sins.

from:  Amit Kumar
Posted on: Mar 10, 2012 at 13:41 IST

Fantastic article by Shalini Singh. Clarity in thinking makes a layman understand the position without confusion. Dr.Manmohan Singh should read this article and use whatever muscle he has (!!!) for the government to withdraw the review petition with grace.I do not mind even if he resorts to resign his PM's post.
So long as the likes of Vahanvati, Kapil Sibal,Abhishek Singhvi,,Salman Khurshid and PC and any other POWER continue to be in the parleys, this may not take place.The government is doomed to add more and more shame.
Ides of March !

from:  Ratnam
Posted on: Mar 10, 2012 at 11:31 IST

The UPA Govt is not as stupid as someone may think after reading this criticism of their decision to appeal. The Congress party is playing to their "core constituency" in creating an impression of victim hood and helplessness. The same has been seen in the criticism of judiciary when the judgments that favor the Congress' ideology are not handed out by the Courts- Ayodhya and Godhra being a cse in point. Also, the Congress party and it's leaders have built huge wealth by granting favors all along, including in 2G. Hence those who have 'bought' those favors with huge kickbacks will at least have to be placated by challening the decision of the honorable SC. The criminal minds understand everything, but still persist with what furthers their selfish interests.

from:  AbdulHamid
Posted on: Mar 10, 2012 at 11:24 IST

Let the executive –the UPA govt. – understand clearly that any move to
refer back to the judiciary either by way of review petition or a presidential reference would be taken by the people as an affront to the judiciary, a sort of teasing the judiciary or plainly embarrassing it. It will be open to the judiciary to return the presidential reference unanswered and there is, and perhaps may be more precedents too. The intelligent legal fraternity could couch the move in an esoteric legal fashion to clothe it with some respectability,. Altogether it is an unwarranted step on the part of the government and will boomerang on it –if not at the apex court , atleast at the electorate level when the govt. seeks its fresh mandate in 2014.

from:  s subramanyan
Posted on: Mar 10, 2012 at 11:07 IST

An excellant and logical article by Shalini Singh.Congratulations to The Hindu.The review petition on 2G verdict and government trying to establish the correctness of the decision of following FCFS method by Raja in the allocation of scarce 2G spectrum to some of the individual promoters who had no previous experience and who sold of these rights to some big corporates and who made huge profits bears no reasonable logic.It also creates doubts in the minds of general public on Raja's decision and Chidambaram's silence in the matter.Why PMO is keen for a review by apex court.Our appeal to PMO is to implement the suggestions of the verdict and in the process if they have a specific problem on implementation go to Apex Court for suggestion on specific issues.Do not conclude that Supreme court has intervened Government on its rights. Since Government has failed to act and Apex Court has commented.PM hould take a more broader view than narrow interpertation of some his advisors.

from:  Narayanan Krishnan
Posted on: Mar 10, 2012 at 10:03 IST

What response can we expect from corrupt government other than this? The government showed it's intention by challenging court order.

from:  ravi
Posted on: Mar 10, 2012 at 09:46 IST

The UPA government is such a disappointment. They are failing the Indian people. And not even after the clear verdict of the Indian people thru protests and the state elections sided with a clear statement by the judiciary is this government ready to accept this obvious mismanagement. What for? I just don't get it. They don't really think they have good chances of getting reelected do they? Thanks anyways for loosing us at least two years of practical standstill in Delhi. Apparently not even for a change to the better...

from:  Mayur
Posted on: Mar 10, 2012 at 09:32 IST

The ruling party and its allies who had looted the country and stashed the loot is Swiss banks are finding it hard to please the companies who had given huge bribes.

from:  G.Raghunath
Posted on: Mar 10, 2012 at 08:59 IST

The obvious idea is to seek out some pliable judges to reverse the 2G verdict. Judges are also vulnerable as the government has a small black book on each judge. I wonder why the Congress has not learnt from the UP elections. Its falling down a steep cliff with no bottom in sight.

from:  Jeff Stewart
Posted on: Mar 10, 2012 at 08:52 IST

Breath taking analysis! Cabinet which has some eminent legal luminaries should be able to see clear writings on the wall and avoid further humiliation of indictment of Government from the highest court “on issues of collective Cabinet responsibility, the Prime Minister's failure to check a Minister, or the Finance Ministry's inability to invoke its powers under the Government of India (Transaction of Business) Rules to stop a Minister from grievously hurting the exchequer and, by consequence, the common man.” Other choice is for Congress to face extinction after the ensuing elections like quote in Bhagavata Purana 1.17.10 “An arrogant king in whose kingdom innocent people are tormented by evildoers loses his fame, longevity, fortune and a meritorious place after death”.

from:  N.G. Krishnan
Posted on: Mar 10, 2012 at 08:47 IST

Ms Shalini Singh's article is amazing in its clarity, thought, legal and more importantly in a way suggesting a corrective course for all the wrongs done in corruptible ways! Congrats to you!Trust the Government sees through the sense made in the article and refrain either from going ahead with its review petition in SC or seek Presidential reference. The more it shows its adamant attitude the more it pays!! In fact, it is a shame on the part of PM and its cabinet to entertain a thought on seeking such a review of judgment - excepting to believe that there are other considerations than Public Good for its actions!!

from:  PS Nath
Posted on: Mar 10, 2012 at 08:11 IST

Good Exposure in this article of the weak ministers trying to find
their faces in the mirror to decide how to reform or how to
continue.When the politics of governance is driven by profit of 1%
with PM protecting it the joke of the day should be that even the
parts of the same body-Nation, the eyes-PM, Feeder mouth-FM and the
ears Telecom minister shall continue to declare that we all are
different and we are not responsible about what wrong the other parts
in the body do. Long live the Nation(body)!"The corrupt are united and
judiciary alone cannot take them on," said ex-Justice AK Ganguly, who
was part of the Supreme Court bench that cancelled 122 2G-spectrum
licences given to various companies at throwaway prices in January
2008 during then telecom minister A Raja's tenure.

from:  Rakesh Manchanda
Posted on: Mar 10, 2012 at 07:47 IST

Kudos and thanks to Shalini Singh. I wish this opinion of hers is read by the Prime Minister, Manmohan Singh, P.Chidambaram, Kapil Sibal, Salman Khurshid, AG Vahanvati, the higher judiciary and also Subramanian Swamy. All these people will get a more in-depth view and truthful position on the whole affairs of the 2G Spectrum scandal. They will get additional points for introspection of their current stand on the issue.

The legal luminaries in the Union Cabinet should brainstorm the issue threadbare and take a rationale decision. One more lethal blow from the Supreme Court will devastate the government beyond redemption. If the Government fails to act, that will be the end of the Congress Party for a very long time to come.

The options that will help the government to restore its position of being a responsible government are:
1. Gracefully withdraw the review petition from the Supreme Court and
2. Get the Jan Lokpal Bill passed on the lines of the demand by Team Anna.

from:  Arumugam
Posted on: Mar 10, 2012 at 06:32 IST

An excellent exposé of the UPA government's collective failure couples with its audacity and arrogance in doggedly pursuing its sense of misplaced entitlement syndrome at the cost of public good. It's pretense of the many abuses of authority as norms under the so called "coalition dharma" has already made it lose dignity, credibility and direction in the eyes of the discerning public and investors. The latest attempt at judicial review tries to chip away at the
last bastion of justice, the admirable Supreme Court.

Posted on: Mar 10, 2012 at 01:32 IST
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